Time-varying capital requirements and disclosure rules: Effects on capitalization and lending decisions

Arbeitspapier

We investigate how banks' capital and lending decisions respond to changes in bankspecific capital and disclosure requirements. We find that an increase in the bankspecific regulatory capital requirement results in a higher bank capital ratio, brought about via less asset risk. A decrease in the requirement implies more lending to firms but also less Tier 1 capital and higher bank leverage. We do not observe differences between confidential and public disclosure of capital requirements. Our results empirically illustrate a tradeoff between bank resilience and a fostering of the economy through more bank lending using banks' capital requirement as policy instrument.

Object Details

• ISBN: 978-3-95729-463-0
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bundesbank Discussion Paper ; No. 18/2018

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation
• Subject: capital requirement ; bank lending ; bank capital structure ; capital disclosure rules

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Imbierowicz, Björn ; Kragh, Jonas ; Rangvid, Jesper
• Event: Veröffentlichung
• (who): Deutsche Bundesbank
• (where): Frankfurt a. M.
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/179959
• Last update: 10.03.2025, 11:41 AM CET